SREDA lowers provincial economic outlook

The Saskatoon Regional Economic Development Authority (SREDA) gave the city’s economy a grade of B-minus for the second quarter of the year, saying it shows signs of stability but recent mining cutbacks are causing increased uncertainty.

On Tuesday, SREDA released two reports, one looking back at April through June and another forecasting what it expects in the third quarter.

“On a positive note, despite recent and significant job losses in the uranium sector, the overall labour market is showing signs of improvement, with 4,100 net jobs created so far this year,” SREDA president Alex Fallon wrote in the Q2 note.

The greater Saskatoon area had a 6.8 per cent unemployment rate in the second quarter and 616 housing starts so far this year, the note says. The average home price in 2018 is $335,046.

In a news release, SREDA said its provincial growth projections for 2018 have been reduced to 1.5 per cent from two per cent.

SREDA has also scaled back its 2019 provincial growth projection, forecasting Saskatchewan’s economy will grow by 1.8 per cent, instead of its earlier forecast of 2.1 per cent.

SREDA said the revision to the third-quarter forecast reflects a “reduction in (the) expected rebound in agricultural output due to dry conditions at the start of the crop year.”

However, it said the province’s near-term growth will be led by renewed activity in the oil sector, growth in the tech sector, strong manufacturing activity and healthy demand for agricultural commodities such as wheat, canola and potash.

SREDA also expects the province to recover from the 2016-17 job losses by next year, which should lower the unemployment rate to 5.7 per cent.